Unlocking potential in Oman

Last edited: 9 April 2014

With full-field development approved at Oman's Khazzan gas field, BP is set to help the Sultanate tap into its significant hydrocarbon supplies. BP Magazine visits the Middle Eastern nation to find out more

Five years after BP drilled its first appraisal well to test the opportunity to produce a major new gas resource for Oman, the Sultanate now finds itself on the cusp of one of the biggest new projects in the Middle East. The Khazzan project involves investment of $16 billion over a period spanning more than 30 years to unlock around 7 trillion cubic feet of gas and deliver a volume equivalent to around a third of Oman’s current total daily domestic gas supply. More than that, it represents the first phase in the development of one of the Middle East region’s largest unconventional ‘tight gas’ accumulations, which has the potential to be a major new source of gas supply for Oman over many decades.

Every major development faces technical challenges and risks, but these have been solved to a large extent through an extensive and rigorous appraisal programme for Khazzan. Step one: complete BP’s largest-ever (at the time) onshore 3D seismic survey, covering an area the size of Greater London. Step two: continually improve drilling techniques using vertical and horizontal wells and hydraulic fracturing to unlock tight gas in hot, tight sandstone reservoirs located almost five kilometres (three miles) below the Earth’s surface. Step three: prove the approach works through an extended well test, exporting gas production from four wells to the national supply grid.

BP has accomplished all of these, giving the company and the Government of the Sultanate of Oman the confidence to approve the project at the end of 2013.

The signing of the agreement in December was a significant milestone for BP. Dave Campbell, general manager and vice president of operations for BP Oman, says: “We are getting into action on what we need to do in Muscat and in the field. We are also mobilising people from other parts of the world to help us safely deliver the project, and we have been working with the government and our partner, the Oman Oil Company for Exploration and Production, to place major contracts for the project.”
"We are getting into action on what we need to do in Muscat and in the field. We are also mobilising people from other parts of the world to help us safely deliver the project."
- Dave Campbell

Significant opportunities

According to Khalid Al Kindi, BP Oman deputy general manager and in-country value manager, the Khazzan project provides three significant opportunities: “First is the energy required for economic development. The Sultanate of Oman has ambitious plans to attract investment into refining and petrochemical investments, including at a new industrial area in Duqm and at the established industrial hub of Sohar, where they will begin to produce more steel, aluminum, and other resources. All these projects have one thing in common – the requirement of energy. The second opportunity relates to what the Government of the Sultanate of Oman calls ‘in-country value’ (ICV) – maximising the opportunities for local Omani companies in our supply chain. The third element is the development of Omani capabilities through the various programmes to invest in the people of Oman.”

According to the United Nations Development Programme, the Sultanate of Oman is one of the most improved countries in the world over the past 40 years in terms of education, healthcare and infrastructure. However, economic activity tends to be concentrated in Muscat and the northeast Batinah region. Significant challenges lie ahead, with rapid population growth creating a need to diversify the economy, grow the private sector, and create jobs for the thousands of young people leaving school each year. The oil sector plays a dominant role in the economy.

As I get on the BP bus at dawn that will transport me to the Khazzan field (a safety measure brought in by BP to reduce risks on the road), I have time to sit and reflect on these achievements from a nation that numbers just three million. Six hours, in fact, because Khazzan is located around 350 kilometres (220 miles) into the interior of Oman, in a concession area known as Block 61. To begin with, the journey takes you along perfect road from Muscat, past the ancient trading city of Nizwa, away from the mountains and into the hot, dry and endlessly flat desert. Closer to the block, we move onto graded gravel roads. The speed slows down and the temperature gradually rises, as we reach our destination at noon. 

The first thing I notice upon arrival is the spirit of the people and the buzz about the place. BP Oman’s people have always been lively and busy, but you can feel a significant change in the atmosphere – a mood of confidence and determination. The Khazzan project is now a definite part of the future, as an energy source for the country, helping to drive industrial growth, business and job opportunities.
"I see a bright future for BP in Oman, where competent Omani leaders will help guide the company to success."
- Abbas Al Lawati

Development programmes

Some of that impact is direct and already visible. For example, through the hiring and development of national staff. More than 70% of BP’s workforce is Omani and the company is aiming to increase the level of ‘Omanisation’ in the coming years. To achieve this goal, BP has set up a series of development programmes.

In 2010, the company introduced its global graduate recruitment initiative, known as Challenge, which provides a structured three-year programme that includes potential for overseas training and development.

“We have recruited more than 30 Omani graduates so far and we intend to build our local workforce through continued recruitment over the coming years,” says Stuart Worker, BP’s head of human resources in Oman.

Raqiba Al Tobi, a geologist Challenger in the subsurface team in Oman, says of her experience: “As a female, I am proud that I am here. I am the only female geologist in the team. It gives me a chance to test myself to the limit and see what I’m capable of.”

Many of the graduates who have secured a place on the programme are looking forward to more challenges in their careers. Abbas Al Lawati, a drilling engineer Challenger in BP Oman, says that there are many opportunities available. “I chose to work with BP because it is an international company. I saw a big opportunity for me to move around the world and experience how other operations work. Not many companies can provide these opportunities in Oman. BP offers worldwide expertise because of the diversity that exists in the organisation. Omanis are the future for BP Oman. BP has an excellent programme to develop our technical and leadership skills and to prepare us for greater responsibilities in the future. I see a bright future for BP in Oman, where competent Omani leaders will help guide the company to success.”

BP has also launched a technicians development programme – a structured five-year programme designed to take diploma graduates from technical colleges from foundation level to world-class technicians over a five-year period. The programme is expected to help more than 120 Omanis develop their skills.

Located in the industrial area of Muscat, the newly-established technicians’ centre is a hive of student activity. Its main hall leads to the student-filled cafeteria, with more halls beyond that lined with classrooms, equipment and tools.

Abeer El-Beloushi, the first female to join the programme and only one of two women, says: “I am the only female here, so, naturally, I face challenges. However, some of the activities that I used to find difficult are now easy and I do them with efficiency. With teamwork and courage, I was able to get through all challenges. Nothing is impossible, you can do whatever you set your mind to. Nothing is too difficult for a woman, and I encourage females to enroll in this programme. Being the only female here makes you strong and confident, your personality stands out, and it enables you to deal with any situation.” BP has hired 40 technicians on to the programme, so far, and has sent the first group of technicians for an overseas training assignment at other BP locations in the US and the UK. 

"Nothing is impossible, you can do whatever you set your mind to. Nothing is too difficult for a woman, and I encourage females to enroll in this programme."

- Abeer El-Beloushi

Invaluable information

Back in the desert, there are more immediate priorities with work going on by BP to decommission the extended well test (EWT) facility. This was designed to prove the deliverability of tight gas from the reservoirs within Block 61, as well as providing surface facility design data. Four production wells were tied back to a processing facility, which operated for more than two years. The project produced invaluable information that was a key factor in sanctioning the full-field development of Khazzan. 

Paul Johnston, BP Oman onshore site manager for operations, says: “We shut down the last of our wells in January, and since then have been working to prepare for deconstruction activities. Our focus and priority will remain on process and personal safety throughout the decommissioning and deconstruction phases.”

As one chapter of BP’s history in Oman ends, the next brings immediate, new challenges, with an rapid ramp-up in the number of people onsite. One of the biggest tasks is to construct the camp facilities, including a new central accommodation complex that will house around 4,000 to 5,000 workers at the site.

At the peak of construction, there will be 8,000 to 10,000 people working within Block 61. On any given day, there may be hundreds of vehicle movements and people working over a wide geographically-dispersed area of approximately 1,500 square kilometres (580 square miles). One of the biggest challenges is managing the safety of so many over a large geographic area.

For Julian O’Connell, vice president of projects for BP Oman, the importance of safety is paramount. “Everyone who comes into Block 61 will be given a common Block 61 induction. We’ll make sure that the contractors and their control of work processes are compliant with BP’s procedures and are gap-assessed against the group designed practice for the control of work. The contractors will be managing their activities within their own control of work framework. We’ll also have a team of BP health and safety experts to make sure that the contractors are adhering to their own safety working practices.”

Geographically dispersed

Another challenge in delivering such a large, geographically-dispersed project in a remote desert location is worker welfare and ‘life support’. Water, for example, is a basic need – not only to hydraulically fracture and stimulate 300 tight gas wells and for construction work, but also for people to drink. One of the initial project activities is to drill water wells into a brackish, salty aquifer within Block 61 and construct a temporary reverse osmosis plant to treat the water, along with a pipeline that will deliver the water to where it is needed. A large workforce in a hot environment will need a lot of water. People working for the project will also need decent accommodation and food, plus medical and recreation facilities. And, every single vehicle movement in and out of the concession area will be controlled and tracked.

The Khazzan field development plan will involve drilling around 300 wells, mostly horizontal, using eight drilling rigs over 15 years. BP will aim to achieve production of around 1 billion cubic feet of gas per day.

“BP is applying innovative technology to unlock Khazzan’s potential,” explains new well delivery manager Steve Rainey. “We are drilling horizontal wells and using hydraulic fracturing technologies to stimulate production. The rocks we are drilling through are very hard, requiring focus on advanced hard rock drilling technologies. Through the application of advanced seismic imaging techniques, we hope to ensure that we drill our best wells first.”

Young technicians at work at the technicians’ centre. BP has hired 40 technicians on to the programme, so far, and has sent the first group of technicians for an overseas training assignment at other BP locations in the US and the UK

Greater productivity

Although BP has overcome many of the challenges of unlocking this tight gas, there remain opportunities to better understand the subsurface and the drilling solutions required in the hydraulic fracturing process to optimise the Khazzan development. Paul Forman, vice president of wells for the Middle East region, says, “If we can drill and stimulate these horizontal wells with the appropriate fracturing techniques, then we end up with greater well productivity and a better cost per barrel situation than we would with a vertical well.”

By the end of 2014, there will be five rigs operating within the block, with large-scale construction work starting up for the central processing facility (CPF), as well as the extensive work to build roads and well-pads, the central contractors’ accommodation, plus a camp for the wells contractors.

BP has taken time to plan rigorously. “What we’ve been doing for the past two to three years is preparing and framing the project for success,” says O’Connell. “That involves a lot of planning. Now, there’s a huge amount of activity to bring the contractors onboard, mobilise the rig and the rig crews and to make sure that they’re doing it all safely, helping them to understand our expectations in terms of how we operate safely and also guiding them in that process to do it effectively. We’re also working to mobilise the contractors and bring them onboard. The time this is taking, the rigour that’s gone into developing the best project for Oman – you can compare the process to preparing for any race. You do a lot of training and preparation and now we’re out at the starting blocks, ready to move.”
Below the surface, the main technical challenges are well known. The common theme continuously discussed is the hard rock environment in Khazzan. Horizontal wells can yield significant value in terms of higher production rates, because they expose more of the reservoir to the well bore. However, fracturing and stimulating a horizontal well five kilometres (three miles) below the surface is no small task, but it is a challenge that BP’s technical teams are excited to work on.

That excitement is palpable at the KZN-14 well, being drilled by the Omani contractor Dalma, with the drill bit 4.5 kilometres (2.8 miles) down and into the horizontal section. The project is highly complex, but the use of bottom-hole instrumentation enables BP to ‘geo-steer’ the drill bit, to keep the well along the right path within the sandstone reservoir. This instrumentation allows BP to continuously collect new information about the target reservoir, and to monitor the location of the wellbore (the hole) itself using the angle from the vertical axis and compass points as coordinates.

Another important objective is to ensure that there are succession plans in place to develop, understand and promote talented Omani individuals into senior roles. Campbell says: “What makes me really excited about Khazzan is that it’s such a significant global project in BP and it’s also very important to Oman. This is about setting up a business that will last many decades and, hence, will benefit several generations of people in the Sultanate of Oman.”

There is much to look forward to with the Khazzan project for BP in Oman and for its growing local workforce. As the minister of oil and gas of the Sultanate of Oman, Dr Mohammed Al Rumhy, said in announcing the project: “As well as providing additional energy supply for Oman, the Khazzan project will generate wider direct benefit with the development of Omani employees and delivering in-country value through the development of the local supply chain.” The Khazzan project represents the first phase in the development of one of the Middle East region’s largest unconventional tight gas accumulations, which has the potential to be a major new source of gas supply for Oman over many decades.

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